The inability of the Nigerian National Petroleum Corporation Limited (NNPCL) to effect duty payments on imported petroleum products including extensive waivers granted the Niger Delta Development Commission (NDDC) has resulted to a revenue loss of N180 billion to Federal Government.
According to reports the national oil corporation failed to remit about N45 billion as duty payable on imported petroleum products to NCS, while NDDC also went away with N135 billion through the Federal Government’s duty concessions, exemptions and waivers.
The loss is in addition to the N3.3 trillion duty exemption also forfeited between 2019 and 2021
The exemptions, which included Value Added Tax (VAT) relief granted on imports, waivers and concessions on import duties, ECOWAS Trade Liberalisation Scheme (ETLS), surcharges, Comprehensive Import Supervision Scheme (CISS), excise and levies was 194.65 per cent more than the N779.74 billion waivers granted in 2020 and N213.1billion in 2019.
The waiver report is contained in the 2022 – 2025 Medium Term Expenditure Framework and Fiscal Strategy Paper.
The report explained that the exemption was a humongous amount of revenue forgone relative to the N1.34trillion collected as total Customs’ revenue in 2021. A breakdown of the aggregate Customs’ exemption showed that waivers on import duties were valued at N435.85billion, surcharge (7 per cent of import duty) was N30.38billion, while Common External Tariff (CET) levy was N1.42trillion.
Also, CISS was valued at N130.04billion; ETLS, N72.91billion; iron levy, N115,879; National Automotive Council (NAC) levy, N41.39millionandVAT(import VAT), N208.24billion.
The report revealed that the highest jump in aggregate Customs exemptions was in the Common External Tariff levy, which jumped from N223.99billion in 2020 to N1.42trillion in 2021.
The report said: “The exemption applied to imported goods covered by diplomatic privileges, military hardwares, fuels and lubricants, hospital and surgical equipment, aircraft (their parts and ancillary equipment), plant and machinery imported for use by companies in export processing zones, health, and medical supplies to abate the spread of COVID.
Other exemptions include reliefs on the presidential initiative on COVID-19 supplies, import duty, and VAT on commercial airlines. The report added that tax expenditure estimated based on the Nigerian tax reference system amounted to N1.95trillion including N1.419trillion from waivers of common external tariff levy, which constitutes 72.6 per cent of all customs tax expenditures, adding that import VAT tax expenditures amounted to N111billion.
Of the N1.419trillionfromwaivers of common external tariff levy, import duties exemption certificate amounted to N1.417trillion.
